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Nicoletta Batini, Mario di Serio, Matteo Fragetta, and Mr. Giovanni Melina
This paper provides estimates of output multipliers for spending in clean energy and biodiversity conservation, as well as for spending on non-ecofriendly energy and land use activities. Using a new international dataset, we find that every dollar spent on key carbon-neutral or carbon-sink activities can generate more than a dollar’s worth of economic activity. Although not all green and non-ecofriendly expenditures in the dataset are strictly comparable due to data limitations, estimated multipliers associated with spending on renewable and fossil fuel energy investment are comparable, and the former (1.1-1.5) are larger than the latter (0.5-0.6) with over 90 percent probability. These findings survive several robustness checks and lend support to bottom-up analyses arguing that stabilizing climate and reversing biodiversity loss are not at odds with continuing economic advances.
Nicoletta Batini, Mario di Serio, Matteo Fragetta, and Mr. Giovanni Melina

protection of wildlife and ecosystems—can generate more than a dollar’s worth of economic activity. The estimated multipliers associated with green spending are about 2 to 7 times larger than those associated with non-eco-friendly expenditure, depending on sectors, technologies and horizons. These findings survive several robustness checks and suggest that ‘building back better’ could be a win-win for economies and the planet. JEL Classification Numbers : C11, H50, O44, P18, Q00, Q01, Q20, Q43, Q50 Keywords : green multiplier, green stimulus, clean energy, conservation

Nicoletta Batini, Mario di Serio, Matteo Fragetta, and Mr. Giovanni Melina

, consumption, or net exports) by 48 cents in the medium run. When the same dollar is spent on solar, wind or geothermal, 11 cents are instead crowded in. In addition, while the green multiplier is statistically significant up until 4 years after the shock occurrence, the non-eco-friendly multiplier loses its significance after 3 years. 20 A fair question is whether the difference between the two multipliers is statistically significant. Bayesian inference does not allow us to construct a test as in the frequentist approach. Therefore, we follow an approach compatible with